Durham drug developer BioCryst Pharmaceuticals suffered a second setback in as many weeks and said late Wednesday it is suspending development of an influenza treatment that had been supported with $235 million in federal research funding.
The company, with 42 employees in Durham and 31 in Alabama, said in a conference call with analysts Thursday morning that it is planning to restructure and cut costs as its major source of funding dries up. BioCryst had spent about two-thirds of the federal research grants that had kept the company afloat.
The company has lost much of its value in recent weeks as its stock nose-dived from a high of $4.69 a share last month to $1.38 as of mid-morning Thursday.
The suspension of peramivir, which was deemed ineffective for influenza by an independent panel of experts, is BioCryst's second drug cancellation. A week ago the company said it was suspending work on a Hepatitis C drug in response to concerns about the drug's toxicity.
"The reality is that everyone looked at the company as a peramivir company," said analyst Stephen Brozak of WBB Securities. "That has to be described as a body blow to the franchise."
Analyst Ed Arce of MLV & Co. said that BioCryst is in "duress" but not doomed. He noted that BioCryst has $44 million in cash but its pipeline of projects has been diminished and delayed.
The recent developments dramatically reduce BioCryst's portfolio of drugs under development. They also throw into doubt a pending merger, announced three weeks ago, with West Coast drug company Presidio.
BioCryst, created 22 years ago, has never produced a drug that is sold on the U.S. market. Peramivir is approved in Japan and South Korea.
In Thursday's conference call BioCryst officials said they will continue to look for a partner to take BioCryst's exerimental gout treatment into human testing. Company officials also announced a new drug, numbered 4430, for which they will seek federal research funding.
"In the scheme of the overall portfolio, there are a number of attractive assets we can pursue," said BioCryst investor relations director Robert Bennett.
"We've been working on a set of backups for a while," CEO Jon Stonehouse told analysts.
John Murawski has been a full-time newspaper reporter since 1991, with stints at Legal Times and The Chronicle of Philanthropy (both in Washington, DC), The Philadelphia Inquirer and The Palm Beach Post (in South Florida) before arriving at the N&O in December 2004. At the N&O he covers energy (nuclear, coal, renewable, efficiency), hydralic fracturing (or "fracking"), public utilities (both electric and natural gas) and health care. His beat includes Progress Energy, PSNC Energy, Piedmont Natural Gas, PowerSecure International, GlaxoSmithKline, Merck, Novo Nordisk, Pfizer, Biogen Idec and others. You can reach him at 919-829-8932 or